Aiming high in the Archipelago

Indonesia, which has long lagged some of its neighbours in economic growth is now, under President Susilo Bambang Yudhoyono, one of the fastest-growing countries in the G20 and is home to some Australian mining companies that are enjoying success.

The enormous archipelago sits on a vast array of resources, including the world’s largest gold mine, and huge reserves of coal and oil. Indonesia is expected to grow 6 per cent in 2010, up from 4.5 per cent in 2009, outpacing other emerging market countries such as Brazil and Russia.

Although a lot of the current growth has been attributed to rising domestic consumption, some who have invested in Indonesia’s future will be boosted by a resources boom. Mining giants such as Rio Tinto and BHP Billiton have looked to exit their Indonesian assets, which tempers the country’s appeal, but some smaller names have remained to try their luck.

Robust Resources (ROL)

Metals explorer
Robust Resources
is broadening its interests in Indonesia, announcing it has approved $8 million in its fiscal 2011 budget to fund an exploration program at the precious and base metals project on Romang Island, north of East Timor.

The funding will go towards an aggressive drilling campaign at the project’s two key prospect areas – Batu Mas and Batu Hitam.

Robust said last month it wanted full ownership of the remaining 25 per cent stake in Romang Island. The deal needs shareholder approval at an extraordinary general meeting in July.

Robust, which operates gold, silver, zinc and copper exploration, with a portfolio of five tenements in the Lachlan Fold belt of NSW, has been a vocal critic of the resource super profits tax.

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Robust stock was worth having late last year, soaring by more than 200 per cent between October and January before topping out at a record high of $2.62. Since then some of the heat has come out of the stock, closing down 6¢ yesterday at $1.59.

Kangaroo Resources (KRL)

Valued at around $100 million, coal miner
Kangaroo Resources
has yet to find its way onto the radar of the big brokers, but after a slide in its shares the quiet achiever is looking attractive.

This has been a watershed year for the small miner. In February Kangaroo Resources announced it had started mining at its second Indonesian coal operation, the Mamahak coking coal project in East Kalimantan. With significant amounts of coal lying close to the surface, the project will have lower strip ratio and lower operational costs.

Kangaroo is targeting initial production of up to 30,000 tonnes of coal a month from Mamahak. Overall it is targeting production of 1 million to 2 million tonnes this year and more than 10 million tonnes a year in two to three years.

Kangaroo’s shares hit a high of 30.5¢ in October but have since lost more than half their value, closing yesterday at 13¢.